DB 430102 RO
                                  STATE OF NEW YORK
                      DIVISION OF HOUSING AND COMMUNITY RENEWAL
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433



          ----------------------------------X     S.J.R. 5818
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW 
          APPEAL OF                               DOCKET NO.: DB 430102 RO  

                    MAXWELL KATES, INC.
                           C/O                                        
                    KUCKER, KRAUS AND BRUH,       DRO DOCKET NO.: ZCD 430022 OM

                                  PETITIONER
          ----------------------------------X                                   


              ORDER AND OPINION GRANTING ADMINISTRATIVE APPEAL IN PART
                                         AND
                           REMANDING PROCEEDING ON APPEAL


          This order and  opinion  is  issued  pursuant  to  a  stipulation
          entered into in the  Supreme  Court,  New  York  County  (Justice
          Fingerhood), remanding an Article 78 proceeding to  the  Division
          of Housing and Community Renewal (DHCR)  for  further  processing
          and a new determination  of  the  owner's  administrative  appeal
          herein.

          The Article 78 proceeding (S.J.R. 5818) was filed  by  the  owner
          against the Commissioner's prior order under Docket No. DB 430102 
          RO, S.J.R. 4690 (issued  April  26,  1991),  which  affirmed  the
          District Rent Administrator's determination that the installation 
          of new gas piping at the subject premises (located  at  345  East
          12th Street, New York, New York)  does  not  constitute  a  Major
          Capital Improvement (MCI).  The Commissioner's prior order  noted
          that the gas piping, with proper installation and maintenance, is 
          expected to last for the life of the building.

          Upon  remand,  the  DHCR's  Engineering  and  Construction   Unit
          reviewed  physical  condition  surveys  prepared  by   consulting
          engineers or architects for  eleven  different  housing  projects
          built under the Mitchell-Lama program.  These  surveys  indicated
          that the useful life of the gas piping inside buildings  is  less
          than the useful life of the buildings (the life expectancy of gas 
          piping most often cited was fifty years).

          After a careful consideration of the entire  evidence  of  record
          the Commissioner is of the opinion that the administrative appeal 
          should be granted in part and this  proceeding  remanded  to  the
          Administrator for further  processing  in  accordance  with  this
          order and opinion.

          The record upon remit indicates that gas piping has a useful life 
          which is less than the life expectancy of buildings in  which  it
          is installed.  Thus, a building-wide replacement  of  gas  piping






          DB 430102 RO
          should not be disqualified for MCI treatment on  the  basis  that
          gas piping is expected to last as  long  as  the  building  does.
          Therefore this proceeding is being remanded to the  Administrator
          for such further processing as is necessary.   Upon  remand,  the
          Administrator should determine (among other things)  whether  the
          useful life of the piping replaced herein  had  expired,  whether
          the installation  otherwise  qualifies  for  MCI  treatment,  and
          any other issues raised by the tenants.

          THEREFORE, in accordance with the applicable  provisions  of  the
          Rent Stabilization Code, the Rent and  Eviction  Regulations  for
          New York City, and Operational Bulletin 84-1, it is

          ORDERED, that the Administrative appeal be, and the  same  hereby
          is granted to the extent of  remanding  this  proceeding  to  the
          Administrator for further  processing  in  accordance  with  this
          order  and  opinion.   The  order  and   determination   of   the
          Administrator remains in full force and effect until a new  order
          is issued upon remand.



          ISSUED:
                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
                                          
    

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